DEAR MEMBERS
I WOULD KIKE TO KNOW THE TAX CALCULATION OF GARTUITY OF AN EMPLOYEE RETIRED FROM PSU COMPANY OIL INDIA LIMITED.
PLEASE GUIDE
1 Replies
Amir
(Learner)
(4016 Points)
Replied 22 June 2010
Hi Sunil,
PSUs employees are considered as "Non Govt." employees for the purposes of income tax.
Hence, gratuity only upto a limit shall be exempt i:e 10 lakhs (3.50 lacs if retired prior to 24 may 2010)
Lower of the following shall be exempt - (if paid under gratuity act 1972)
1) Amount received
2) Limit of 10 or 3.5 lacs
3) 15/26 x salary* x no.of years of service (in excess of 6 months shall be taken as full year)
Salary measn last drawn basic + da
Lower of the following shall be exempt - (if NOT paid under gratuity act 1972)
1) Amount received
2) Limit of 10 or 3.5 lacs
3) 15/30 x salary* x no.of years of service (any fraction is to be ignored)
Salary measn - preceding 10 months avg salary - basic + da (under terms of employment) + commission based on fixed percentage on turnover
U have mentioned the name of the company, I think it is governed by "Payment of Gratuity Act"....SO FIRST ONE WILL APPLY
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